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Thursday, June 27, 2013

Supreme Court strikes down Defense of Marriage Act – What does this mean for same-sex couples in Pennsylvania?

On June 26th the
United States Supreme Court struck down the federal Defense of Marriage
Act (DOMA). The court’s 5-4 decision in United States
v. Windsor was a great victory for supporters of same-sex marriage. But
what does it mean for Pennsylvania couples?

Now, under the Supreme
Court’s ruling in Windsor, same-sex married couples must receive the same federal
treatment as married couples of the opposite sex. This involves both benefits and burdens (such as potentially higher income tax rates due to the “marriage penalty”
and pooling of a couple's resources for purposes of qualification for Medicaid
benefits).

The court’s decision
does not mean that there is a constitutional right to same-sex marriage. The
court dodged that murky and politically charged issue by dismissing a second same-sex
marriage case, Hollingsworth
v. Perry, on procedural grounds.

Here is a “plain
English” explanation of the Windsor decision supplied by Amy Howe of the SCOTUSblog on June 26th:

The federal Defense of Marriage Act defines
"marriage," for purposes of over a thousand federal laws and
programs, as a union between a man and a woman only. Today the Court ruled, by
a vote of five to four, in an opinion by Justice Kennedy, that the law is
unconstitutional. The Court explained that the states have long had the
responsibility of regulating and defining marriage, and some states have opted
to allow same-sex couples to marry to give them the protection and dignity
associated with marriage. By denying recognition to same-sex couples who are
legally married, federal law discriminates against them to express disapproval
of state-sanctioned same-sex marriage. This decision means that same-sex
couples who are legally married must now be treated the same under federal law
as married opposite-sex couples.

The court's decision does not create a national
constitutional right to same-sex marriage. It does mean that married same-sex couples
living in states where their unions are recognized as legal must be treated as
married for purposes of federal benefits. Currently 12 states and the District of
Columbia recognize gay marriage. (The Hollingsworth decision effectively adds
California to that list).

EFFECT OF THE WINDSOR RULING ON PENNSYLVANIA COUPLES

What about gay couples living in Pennsylvania and other states
where same sex marriage is not currently recognized? What is the effect of this
ruling for Pennsylvania couples?

The case does not
affect same-sex couples residing in Pennsylvania who have not been validly
married in another jurisdiction. Only couples who have been lawfully married
are impacted by the ruling.

But the implications
are complicated and evolving for Pennsylvania same-sex couples who have been
validly married in another jurisdiction.

PA
State Benefits Not Affected

Pennsylvania statutory law is legally
hostile to gay marriage. Act 124 enacted in 1996 (the Pennsylvania
Defense of Marriage Law, 23 Pa.C.S 1704) holds that “marriage shall be between one man and
one woman” and that a “marriage between persons of the same sex which was
entered into in another state or foreign jurisdiction, even if valid where
entered into, shall be void in this Commonwealth.”However, the Pennsylvania Constitution contains a direct prohibition against denial or abridgment of equality of rights because of sex. Section 28 of the Pennsylvania Constitution states:

"Equality of rights under the law shall not be denied or abridged in the Commonwealth of Pennsylvania because of the sex of the individual."

For now the current Pennsylvania governor will be supportive of the Pennsylvania Defense of Marriage Act statute. So, state
benefits and privileges granted to married couples under Pennsylvania law will
not immediately change as a result of the Windsor decision. They won’t change unless or
until there are successful legislative or judicial or executive challenges to current PA
law.

Legally married same-sex couples residing in PA will not be treated as married for purposes of state inheritance,
state pensions, state taxes, etc. The differences can be very significant. For example, the PA
tax rate on inheritance by a surviving spouse is 0%. The tax rate between same-sex
couples is 15%.

Federal
Benefits for PA Couples

The federal benefit situation
is confusing for same-sex spouses who are legally married, but reside in Pennsylvania.
Various federal agencies follow different standards in determining who is
married.

Some federal agencies
follow the “place of celebration” standard. This means that if a couple was
legally married in any jurisdiction, the marriage is recognized by the agency.
But other agencies follow a “place of residence” standard which requires that
the marriage be recognized by the place where the couple is living for them to
be eligible for the benefit.

The place of residence standard is followed by the
Internal Revenue Service, the Social Security
Administration and the Department of Veteran’s Affairs according to NPR’s
breaking news two-way
blog. (See below for the SSI program regulation).

The result is a mess
that is going to have to be fixed either by Congress via legislation or
President Obama via regulation. Don’t count on Congress agreeing on anything.
But President Obama seems to be already moving towards changing regulations.

In a statement
issued after the Windsor ruling, the President said: "So we welcome
today's decision, and I've directed the Attorney General to work with other
members of my Cabinet to review all relevant federal statutes to ensure this
decision, including its implications for Federal benefits and obligations, is
implemented swiftly and smoothly."

It seems likely that
the Obama Administration will seek to broadly apply a place of celebration
standard. But some definitional standards are created by statute and may not be
subject to regulatory change. So it may take some time and possibly litigation before
a universal definition of marriage is achieved for federal benefit purposes.

Advance Planning is Important

The Windsor case is a
big step forward for same-sex couples, but it is only a partial step towards true
legal equality. Nontraditional couples residing in Pennsylvania, whether legally married or
not, still need to plan in advance to protect their partners. As my friend and
co-author, Kirby Upright, has noted in his chapter of the book Estate
Planning in Pennsylvania:

[E]state planning is probably far more important for the
nontraditional couple (i.e., same-sex partners or unmarried partners of the
opposite sex) than for traditional couples. Ironically, no such laws address
the many complications that develop in a nontraditional relationship. Consequently,
nontraditional couples are left to their own means, with little assistance from
the legislature, to protect their property rights and the rights of their loved
ones. (Estate Planning for Nontraditional Couples, Chapter 9 of Estate
Planning in Pennsylvania, PBI Press, 2012 Edition).

As Bob Dylan sang, “The Times They Are A Changin’” but the law
tends to move slowly – it’s a local train, not an express. Same-sex and other
nontraditional couples should sit down with their advisors and get their legal and
financial planning in order. There is much that can be done to limit the problems
and uncertainties that can hurt your loved ones while the law inches forward.

Further Information

As of July 1, 2013 the following US jurisdictions recognize same sex marriage:

California (pending)

Connecticut

Delaware

District of Columbia

Iowa

Maine

Maryland

Massachusetts

Minnesota

New Hampshire

New York

Rhode Island

Vermont

Washington

Here is the current SSI
regulation on who is considered to be married:

(a)
We will consider someone to be your spouse (and therefore consider you to be
married) for SSI purposes if—

(1)
You are legally married under the laws of the State where your and his or her
permanent home is (or was when you lived together);

(2)
We have decided that either of you is entitled to husband's or wife's Social
Security insurance benefits as the spouse of the other (this decision will not
affect your SSI benefits for any month before it is made); or

(3)
You and an unrelated person of the opposite sex are living together in the same
household at or after the time you apply for SSI benefits, and you both lead
people to believe that you are husband and wife.

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About Me

I am a Pennsylvania lawyer with over 35 years experience in estate planning and elder law. I was selected by US News Best Lawyers® as its Lawyer of the Year in Elder Law for 2014 for the Harrisburg, Pennsylvania metropolitan region.
I am of counsel to Marshall, Parker and Weber, a law firm which has offices in Williamsport, Jersey Shore, Wilkes-Barre and Scranton, Pennsylvania. I am past President and a founder of PAELA (the Pennsylvania Association of Elder Law Attorneys). However, the views expressed on this site are my own and not those of PAELA or of Marshall, Parker and Weber.
Most importantly I am a husband, father and grandfather.